Money & Banking

IOB eyes 16—18% credit growth in FY13

PTI Mumbai | Updated on April 11, 2012 Published on April 11, 2012

Public sector lender, India Overseas Bank, on Wednesday said it is aiming a credit growth rate of 16—18 per cent and a deposit growth rate of 18—20 per cent in the current financial year.

“Currently, we aim 18—20 per cent deposit growth and 16—18 per cent credit growth in FY13,” IOB Chairman and Managing Director, Mr M Narendra, said.

He added deposit growth for the bank stood at 18—19 per cent for the last fiscal against 13—14 per cent witnessed by the banking system.

“Luckily, for us, even though CASA (current account, savings account) has not given us much growth, we had a good retail growth. Our deposit growth is around 18—19 per cent against the systemic growth of 13—14 per cent,” he added.

Total deposit of banks grew by 13.4 per cent to Rs 60.72 trillion as of March 23, which is below the RBI’s projection of 17 per cent for the last fiscal.

Referring to expectation from the upcoming credit policy, Mr Narendra said the central bank would take a view after considering inflation number along with current tight liquidity situation.

He, however, said reduction in lending rates by the bank will be little difficult due to present cost structure.

“The cost of resources has not gone down and, in fact, margins are under stress. Unless, we are able to ramp up CASA growth along with a parallel growth in yield, it will be little difficult (to cut interest rates) at this point of time,” Mr Narendra said.

About hiring plans in the current fiscal, he said the bank will hire around 3,500 officers and clerical staff in this fiscal.

The bank also said non performing asset (NPA) level of the bank is manageable.

“For IOB, we have hardly 5 per cent defaults from our restructured assets. So, we are quite comfortable as far as NPA is concerned,” he said.

Net profit of the bank fell by 53 per cent to Rs 108 crore during the third quarter owing to higher provisioning and rise in restructured assets.

Total income of the bank grew by 45 per cent Rs 5,015.33 crore during this period against Rs 3,452.86 crore in the same period last fiscal.

Published on April 11, 2012
This article is closed for comments.
Please Email the Editor